Board: Nebraska revenue drop won’t be as sharp as expected
LINCOLN, Neb. (AP) — Nebraska tax revenue will likely dip below earlier projections because of the coronavirus, but the state’s budget picture won’t be as bad as previously expected, a state board predicted Thursday.
The Nebraska Economic Forecasting Advisory Board lowered its outlook for state tax collections in the current fiscal year, which began July 1.
Their estimates will reduce the amount of revenue available to lawmakers this year by $48.5 million, from $138.6 million down to $90.1 million. Nebraska will collect an estimated total of $5.125 billion this year.
National forecasting services had suggested the state would see a much sharper decline.
But board members said Nebraska’s economy appears to be stronger than other parts of the country because it relies less on hospitality services that were devastated by the pandemic. They also pointed to a still-strong housing market and the federal assistance that businesses received to soften the virus’ impact.
“Nebraska is really a shining star and has done really well,” said board member Thomas Henning.
Board member Steve Seline, an Omaha attorney and radio executive, said his company’s station in Illinois has seen a roughly 50% drop in revenue because of the pandemic and the cancellation of local concerts, but its Nebraska stations have only experienced a 10% decline.
“I’m probably more optimistic than I should be,” he said, noting that he suspects Nebraska is faring better than other states.
Other board members said they were concerned about the impact of widespread layoffs and employees who have seen their work hours cut. Board member Richard McGinnis said he was worried about “people who are living paycheck to paycheck” and a possible increase in personal bankruptcies.
“Until these things play out, it’s all still a guessing game,” McGinnis said.
In a statement, Gov. Pete Ricketts said the forecast reflects the strength of Nebraska’s economy. He argued that it should clear the way for lawmakers to lower property taxes and approve new tax incentives for businesses.
But Sen. John Stinner, chairman of the budget-writing Appropriations Committee, said he plans to take a cautious approach to the rosy predictions.
“In my mind, I think we need to be as conservative as we possibly can because of the uncertainty,” he said.
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